RICO Risk for Hiring Illegal Workers

SK Foods, located in California’s San Joaquin Valley, is a grower of tomato and vegetable products with thousands of employees. Former employee Robin Brewer filed suit against SK Foods and its president, Scott Salyer, pursuant to the Racketeer Influenced and Corrupt Organizations Act, or RICO, alleging that the defendants had knowingly hired illegal workers to depress the wages of legal workers.

The U.S. District Court for the Eastern District of California in Sacramento held that Brewer’s lawsuit adequately alleged claims for violations of the Immigration and Nationality Act’s prohibitions on knowingly hiring, and therefore alleged racketeering activity necessary to proceed with a RICO claim.

The court found that to state a RICO claim, Brewer must allege the conduct of an enterprise through a pattern of racketeering activity causing injury to the plaintiff and other legal workers. The court held that a violation of the INA can be considered an act of racketeering activity, also called a predicate act , where at least two predicate acts within a 10-year period are alleged.

Brewer alleged that the Social Security Administration often notified SK Foods that large numbers of its employees were using false Social Security numbers, and that the company permitted those workers to continue working under new identities. Brewer thereby alleged the predicate acts by saying Salyer and the company had knowledge that the aliens were undocumented. Brewer v. Salyer, ED Cal., No. 1:06 cv01324 (5/17/07).

Impact: Employers who hire immigrants with no lawful authorization to work in the U.S. are at risk with such claims. Employers are advised to carefully review and ensure their compliance with applicable regulatory requirements that detail pre-hire screening of job applicants to ensure they are lawfully entitled to be employed in the United States.